Impact of typhoon expectations persists, Shanghai spot copper premiums continue to rise [SMM Shanghai spot copper]

SMM, July 8:

Today, spot #1 copper cathode against the current-month 2606 contract was quoted at premiums of 100–170 yuan/mt, with an average of 135 yuan/mt, up 25 yuan/mt from the previous trading day. In early trading, SHFE copper for the 2607 contract moved sideways before spiking and pulling back slightly. The opening price was 102,800 yuan/mt, after which prices mainly traded between 102,740 and 102,940 yuan/mt. Prices then surged rapidly, hitting an intraday high of 103,150 yuan/mt, before pulling back slightly toward the close to settle at 103,040 yuan/mt. The price spread between the front-month and next-month contracts ranged from a Contango of 30 yuan/mt to a Backwardation of 10 yuan/mt. The import profit margin for SHFE copper against the 2607 contract ranged from a loss of 40 yuan/mt to a profit of 40 yuan/mt.

During the day, the sales sentiment for copper cathode in Shanghai stood at 3.06, up 0.09 MoM, while the purchasing sentiment was at 3.00, down 0.10 MoM. Historical data can be accessed via the database. Early in the morning session, standard-quality Yuguang copper was quoted at a premium of 70 yuan/mt and traded swiftly. Subsequently, suppliers quoted standard-quality brands such as Dajiang PC, Zhongjin, Tiefeng, Jinfeng, and Dajiang HS at a premium of 100 yuan/mt, with Lufang and Xiangguang quoted at premiums of 110–120 yuan/mt. High-quality copper brands, such as Guixi and Jinchuan (plate), were quoted at premiums of 160–180 yuan/mt. Registered SX-EW copper ESOX was quoted at a premium of 30 yuan/mt. Trading was active, with low-priced cargoes hard to find. Entering the second session, suppliers showed a stronger inclination to hold prices firm, with brands such as Jinguan, Jinxin, and Jintun PC raising EXW quotes to a premium of 110 yuan/mt. Some suppliers held back from selling, awaiting further increases in premiums. Non-registered copper traded successively at discounts of 120–80 yuan/mt.

Looking ahead to tomorrow, the impact of Typhoon Bavi is expected to continue unfolding. Downstream copper processing enterprises exhibited strong purchasing enthusiasm, with some enterprises stockpiling in advance on concerns over subsequent logistics disruptions, providing solid support on the demand side. Judging from supplier behavior, after low-priced cargoes were quickly absorbed during the day, available spot supplies remained tight. Suppliers held back from selling amid strong sentiment, with some holding cargoes in anticipation of higher prices, further pushing up spot premiums. The import profit margin was near breakeven, but near-term replenishment from outside China was limited. Overall, spot SHFE copper prices against the 2607 contract are expected to maintain their premiums tomorrow, with the overall performance remaining firm. Further attention should be paid to the actual path of the typhoon and the sustainability of downstream stockpiling.